MERCER TOTAL COMPENSATION REVIEW June 2016 Bentley Human Resources

What We Will Discuss Today 1.Who is Mercer? 2.What is a “total compensation review”? 3.Why did Bentley do this? 4.What did Mercer do? 5.What will Bentley do with Mercer’s work? 6.What about benefits? Bentley Human Resources

What We Won’t Discuss Today Individual salaries Bentley Human Resources

1. Who is Mercer? National consulting firm that provides consulting services on a variety of workplace/business issues including compensation and benefits Review was led by a senior partner with 30+ years experience in higher education compensation Bentley Human Resources

2. What is a “total compensation review” Total Compensation includes - – Pay (salary, bonuses) – Benefits Medical and dental Retirement Time off Group benefits (life, LTD) – Other good stuff (tuition remission, free parking, 35- hour week, summer hours, work environment, library, athletic facilities, discounts, work/life balance, development opportunities, etc.) Bentley Human Resources

3. Why did we have this review done? “Comp project” in – Created a comp program – Benchmarked jobs against market data, created new salary grades, developed job ladders and guidelines – Educated managers and staff about how to think about comp A good start; ready for next version Bentley Human Resources

4. What did Mercer do? Compensation – Reviewed salary surveys – Reviewed benchmark jobs – Updated market data – Developed new salary grades – Developed a compensation philosophy What the heck does all this mean? Bentley Human Resources

Salary Surveys Employers input salary data for their jobs into annual surveys conducted by third parties and in return get survey data to use – Different types of surveys: higher ed, general industry, specialty – Get the right “cut” of the survey data Boston area, Northeast, similar schools, etc. – Mercer liked our surveys and cuts but suggested some streamlining! Bentley Human Resources

Benchmark Jobs Surveys have data by job We compare our jobs to the jobs in the survey If it looks like the jobs are comparable, then the job in the survey is a good “benchmark” ~60% match between Bentley jobs and survey benchmark jobs is desirable; we got matches to ~75% of our jobs (yay!) What about the other 25%? (we’ll get to them!) Bentley Human Resources

Market Data We looked at the market data for the benchmark jobs in the surveys and compared it to the salaries for our actual jobs A caveat before we go further – Market data provides a range of what employers pay Market data does not provide an exact salary that should be paid for a particular job If only it was that simple... Bentley Human Resources

Sample Market Data Survey Job Code Job TitleNumber of Employers Number of Employees 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile Employee Weighted Average 18702Office Assistant I 783,255$27,816$30,603$35,000$40,468$45,978$36, Office Assistant II 782,969$31,620$36,728$42,765$47,840$59,043$43, Office Assistant III 561,462$39,780$44,000$50,000$56,280$68,000$51,871 Bentley Human Resources

Salary Grades Using the market data for the benchmark jobs, Mercer recommended a new salary grade structure – Broader ranges than our current grade structure with fewer grades HR is in the process of assigning a new salary grade to all staff jobs Here’s where the 25% of un-benchmarked jobs get taken care of – slotting “like with like” Bentley Human Resources

Sample Salary Grades GradeMinMidMax A$113,000$141,000$170,000 B$98,000$123,000$147,000 C$86,000$107,000$129,000 D$74,000$93,000$111,000 E$65,000$81,000$98,000 F$56,000$70,000$84,000 G$49,000$61,000$74,000 H$42,000$53,000$63,000 I$37,000$46,000$56,000 J$32,000$40,000$48,000 Bentley Human Resources

Market Data vs. Salary Grades What’s the difference? – Market data = external data to compare ourselves against other employers – Salary grades = internal pay structure to ensure jobs similar in scope and responsibility are paid in the same range HR and managers use both to determine salaries and salary adjustments Remember: Market data and salary grades provide ranges that are guidelines; they don’t provide an exact salary that should be paid Bentley Human Resources

Compensation Philosophy “Market and Merit” Market medians are used as guidelines Base salary in relation to market data is based on merit-based factors Increases recognize and reward high performance Bentley Human Resources

5. What Will Bentley Do With the Mercer Review? Mercer analyzed all staff salaries to identify how salaries compare to market data and the new salary ranges HR, VPs and managers have been reviewing that analysis to determine what jobs need a salary adjustment based on “market and merit” This will be an ongoing process Bentley Human Resources

FY17 Salary Adjustments Annual pool: 2.5% – Each employee’s annual increase on 7/1 is determined by VPs and managers; no guarantee of 2.5% “Market adjustment pool”: additional 1.5% – VPS and managers will allocate this pool on 7/1 consistent with “market and merit” philosophy “Mid-year pool”: additional 0.5% – Typically used for promotions or to adjust budgets for vacancies if needed Bentley Human Resources

How Salaries Are Determined “Art and Science” Factors considered when setting/adjusting salaries – Market data – Salary grade range (internal equity) – Salary compression/inversion – Merit factors: high performance, experience (at Bentley and elsewhere), skills, etc. – Practical factors: budget, available resources, business needs and priorities, etc. Bentley Human Resources

How Salaries Are NOT Determined Too much “art”; too little science “Anecdotal” evidence – Calling our friends (who may exaggerate) – Calling our competitors (illegal) Anti-trust violation; price-fixing. The feds don’t like it. Unreliable sources – Salary.com, Glassdoor, etc. – Unverified data – Self-reported – Don’t account for all factors that go into salary decisions, including Bentley’s comp philosophy and resources Bentley Human Resources

How is My Salary Decided? (it takes a village... ) VPs/managers and HR have been reviewing all salaries in light of the Mercer analysis and Bentley’s new comp philosophy VPs and managers don’t set or change a salary without consulting with HR and Budget HR wouldn’t determine or change a salary unless approved by VP/manager and Budget Budget process - Cabinet requests/Trustees approve $$ for salary increases You! Bentley Human Resources

6. What About Benefits? Mercer compared our benefits against benefits offered by 13 colleges and universities in MA Overall, we compared very favorably – “Great!” - Retirement contributions, vacation, holidays, sick days, life insurance, LTD, STD – “Pretty darn good!” - Medical – “Room for improvement” - Dental (basic plan compared), personal days (but only because we offer 2 and others offer 3) Bentley Human Resources

As If That Isn’t Enough... Bi-weekly payroll is coming September 1 st ! “Help us help you” – Information session on Monday, June 20 th from 12:00-1:00pm; LaCava 375 – Budget counseling – HR Website FAQ’s Resources Bentley Human Resources

Questions? This was too much information! Can you repeat it all? – Not now, but these slides will be on the HR website and we will send a link to the Staff DL What if I want more information about my salary? – Start with your manager – HR is available Bentley Human Resources